November 23, 2014
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Chamber’s opposition to Quonset ferry a slap at free competition
My take on the news
Lonnie Barham

FAST FERRIES AND ANTI-COMPETITION: The Narragansett Chamber of Commerce has voted to oppose a successful ferry company from expanding its business at Quonset Point by adding a fast ferry from Quonset to Block Island. In its letter to the Public Utilities Commission, the state agency that must license the proposed new ferry, the chamber claims the move will take business from the current Block Island ferry that operates out of Galilee and is run by Interstate Navigation. The chamber’s executive director, Deborah Kelso, told the PUC, “There is no elusive new market to draw from to fill the RI Fast Ferry at Quonset.  They will have to rely on enticing existing Galilee passengers to veer off Route 4 onto Route 403 into the Quonset Industrial Park.”

Kelso must live in another Rhode Island! Isn’t she aware of the daily beach traffic backup on Route 4 that causes anyone living north of East Greenwich to avoid the southern part of Route 4 completely during the summer? There is a huge market of Rhode Islanders who live from Coventry and Warwick to Providence and points north who will gladly take the new ferry from Quonset to Block Island but would never suffer through summertime Route 4 traffic to get to Galilee. And, since they will be new customers, they will not subtract from the number who currently use the Galilee ferry.

Not only is the Narragansett Chamber’s objection an anti-competition, anti-business proposal from an organization that is supposed to support business, it is just plain stupid in its assertion that there is no new market for the Quonset ferry. 

HEDGE FUNDS AND INSURANCE POLICIES: Why is it so hard for people to understand that investments in hedge funds are simply a form of financial insurance? Public service unions and various pundits decry General Treasurer Gina Raimondo’s investment of 14 percent of state pension money in hedge funds. Yet, these same critics have insurance policies on their lives, homes, cars, and health. Hedge funds don’t pay big dividends to investors during “good times” when the stock and bond markets are booming, just as insurance policies don’t pay policy holders when they are alive and healthy, when their homes haven’t burned, and their cars are accident free. During these “good times’” both hedge fund investors and insurance policy holders pay fees and premiums to “hedge” their financial risks against “bad times”. When hedge funds and insurance policies pay off are when stocks and bonds tank and when insurance policy holders suffer death, ill health, or damage to assets.

Evidence of how important it is to hedge risks by parking money in alternative investments is provided by Brown University, whose endowment fund - one of the most successful in the country - places 48 percent of its long term investments in hedge funds and other alternative investments. Brown has been around since before our country was founded and its endowment fund has succeeded extremely well in the long term investment market. 

Gina Raimondo is managing the state’s pension fund investments in the same manner a responsible citizen manages risks to his or her life, health and assets - she is buying insurance via investing in hedge funds. Her critics would have far more credibility if they would divest themselves of all personal and property insurance; thus, putting their money (their risk) where their mouths are.  

“IT’S ALL IN OUR BACKYARD” CAMPAIGN: It’s a recurring theme in American politics: when things are going very badly, come up with something flashy to make the public forget the dismal times. Politicians from Governor Chafee to Mayor Fung lauded Rhode Island Foundation’s new “It’s all in our backyard” campaign designed to remind Rhode Islanders how “wonderful” we are. Yet, professional economic analysts panned the program. When intellectually astute, university-based economic thinkers like Gary Sasse, Edward Mazze, and Leonard Lardaro all indicate the “feel good” campaign will do little or nothing for our economy, Rhode Islanders should closely scrutinize the salutary outcomes the campaign’s supporters insist will result. As Professor Lardaro stated in an opinion likely shared by the other two, “The campaign won’t make much difference if Rhode Island’s leaders don’t prepare for the ‘fiscal train wreck’ coming our way...” Let’s hope the campaign doesn’t mesmerize our legislators so that another General Assembly session goes by without enactment of substantive economic improvements.

RICH VS. POOR IN R.I. POLITICS: It’s easily discernible which political party is “rich” and which is “poor” in Rhode Island. A recently published list of upcoming fundraising events spelled out the difference. Democrats will host such events as: a Newport weekend of fancy dinners with David Cicilline for $2,600 per person; an elaborate golf outing at Shelter Harbor in Charlestown with James Langevin for $1,000 per person; a Boston Red Sox game with Langevin in luxury seats with flowing refreshments for $1,000 per person. And, on the Republican side? A $25 dollar per person backyard fundraiser at the home of GOP Chairman Mark Smiley where attendees will eat hotdogs. Of course, there may be more Republican fundraisers planned where the entry fee is higher, but it still looks like the Republican Party has a very long way to go to catch up with the money raking expertise of the Democratic Party in Rhode Island.

PRESIDENT EXEMPTS CONGRESS FROM OBAMACARE: As we learned a few weeks ago, President Obama decided to delay for one year the Affordable Care Act’s mandate that businesses with more than 50 employees must provide health insurance for their employees. Even though the act as passed by Congress, primarily Democrats, mandated the requirement apply this year, Obama once again arbitrarily and unconstitutionally overrode Congress to delay it – primarily because his administration was woefully ill prepared to implement it. 

Now we learn that Obama’s at it again. This time, he is exempting member of Congress and senior congressional staffers from the requirement to purchase health insurance through the Obamacare exchanges. Congress had included language in the health care act that eliminated federal health insurance for its members and staff because it wanted to show that it could live under the same Obamacare insurance it was imposing on the rest of us. Without federal health benefits, congress members and their staffs would have to buy their own insurance through the exchanges. However, because their salaries average $174,000 per year, they would not be eligible for Obamacare subsidies. Thus, their overall take-home pay would decline.

To address the so-called “brain drain” the mandate would supposedly have on congressional staff members, the Obama administration has decided to again circumvent Congress and unconstitutionally exempt it from Obamacare mandates. Instead, the Obama administration will subsidize up to 75% of congressional health insurance costs, regardless of the recipients salary. Not only is it another illegal circumvention of the act as passed by Congress, but it flies directly in the face of the act’s rhetoric claiming “fairness” for all Americans. Apparently, what’s good for the public in Obama’s eyes just isn’t good enough for the political class.

QUOTES BORN OF HUBRIS: President Barrack Obama in 2009: “Al-Qaida is on the run!” Obama in his 2012 State of the Union Address: “Al-Qaida is a shadow of its former self.” Do you think, perhaps, he wishes he hadn’t made such arrogant assertions now that he’s put the world on notice that al-Qaida can strike anywhere at any time?

QUOTE OF THE WEEK: Josef Joffe, a Stanford University expert on foreign policy, wrote an opinion piece for the Wall Street Journal this week that talked about President Obama’s numerous foreign policy failures, especially his failed efforts with Russia’s President Vladimir Putin. Regarding Obama’s failure to convince Russia to refuse asylum to NSA secrets leaker Edward Snowden, Jofee remarked: “Why did Mr. Putin decide to thumb his nose at the U.S. after playing cat-and-mouse for six weeks?  Easy - because he could.  He has taken the measure of Barack Obama, concluding that there isn’t much there there.” 


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